The complications of sliding fee scales

Robert J. Walsh and Norman C. Dasenbrook April 3, 2008

In this month’s column, we want to address a question sent in to us by many members of the American Counseling Association. This issue has to do with private practice billing, particularly the issue of using a sliding fee scale. We will offer our opinion from the viewpoint of private practitioners, while ACA Chief Professional Officer David Kaplan will discuss some of the ethical considerations.

We recommend against using a sliding fee scale, both in our book The Complete Guide to Private Practice for Licensed Mental Health Professionals and on the “Private Practice Pointers” section of ACA’s website (from the home page at www.counseling.org, click on “Counselors” and then “Private Practice Pointers”). Our reasoning is related to the difficulty of setting and administering the fees. Another reason has to do with the complications that arise when a clinician has contracts with managed care companies. If you have a signed agreement with Blue Cross Blue Shield, for example, the company will pay 85 percent of your “usual and customary” fee. But if the managed care company finds that your lowest sliding fee is, let’s say $30, it will pay you 85 percent of that amount on all your billing — even the higher fee amounts.

If you do not deal with managed care companies, then it’s a different story. Before managed care covered licensed professional counselors some 12 years ago, I (Bob) used a simple formula: .001 x Family or Individual Yearly Income. (Example: $36,000 = $36 per hour.) I simply trusted clients to tell me the truth, because inspecting tax documents would have been time consuming. That model worked fairly well, but I always worried about the outside chance that a discussion in my waiting room over fees would cause issues.

Today, I deal with clients who have limited income but don’t have insurance by offering three pro bono spots per week, scheduling them at low demand times during the day. I also offer half-hour times to some clients for a half fee. We don’t waste any time, getting down to business right away. These two strategies permit me to maintain my social interest in the community by still being of service to clients of all income levels.

This answer may appear to be pretty complex for a seemingly simple issue, but in our experience, this issue grows more complex when really examined. In the final analysis, we can each use our own discretion in fee setting, which is the great thing about being our own boss in private practice.

Ethical considerations

David Kaplan: The counseling ethics perspective very much supports Bob and Norm’s statements. Nothing in the ACA Code of Ethics prohibits the use of a sliding fee scale. However, the ACA Ethics Committee recommends against using a sliding scale. Why? Because it is discriminatory.

A sliding fee scale charges people with larger incomes more for the exact same service that is being provided to clients with lesser incomes. Along those lines, it has been argued that a sliding scale can come across as gouging — that you are looking to squeeze as much money as you can out of an individual. That is why you aren’t charged according to income in a physician’s office, at the grocery store, at the gas pump or at the dentist.

Of course, we know that counselors who use a sliding scale are not trying to gouge their clients. Quite the opposite — counselors who use sliding scales are attempting to make counseling affordable to those with limited incomes. So how can you do that without using a sliding fee scale? The answer lies in Bob and Norm’s suggestion to keep a certain number of pro bono slots available for those who can’t afford counseling. How many hours should you designate as pro bono? That is up to you, but the number I have heard bandied about most often is 10 percent of your total practice hours.

Information detailing the essential components of implementing a required transfer plan, as addressed by the 2005 ACA Code of Ethics (Standard C.2.h., “Counselor Incapacitation or Termination of Practice”), is now posted in a bulletin on the “Private Practice Pointers” section of the ACA website.

Finally, the Illinois Mental Health Counselors Association will be offering the workshop on June 8. More information is available at www.imhca.org.

ACA members can e-mail their questions to Robert J. Walsh and Norman C. Dasenbrook at walshgasp@aol.com and access a series of “Private Practice Pointers” on the ACA website at www.counseling.org.